Nov. 6, 2009 (The Yomiuri Shimbun) -- Seven of the nation's eight major automakers, including Toyota Motor Corp. (NYSE:TM) and Honda Motor Co. (NYSE:HMC) , revised their earnings forecasts upward for the business year ending March 2010 in their interim consolidated settlement of accounts for September, which was released Thursday.
All of the companies have implemented thorough cost-cutting measures, and demand for their automobiles was supported by increased demand in China and other emerging nations as well as by government-backed car purchase-incentive schemes in many countries.
Profits at all seven of the companies remain low compared with the level before the financial crisis that began last autumn. Other concerns also remain, such as the high value of the yen and a possible decline in vehicle sales when government incentives end at home and abroad.
Total combined sales of the eight companies listed in the interim consolidated settlement of accounts for September was about 19 trillion yen, down 30 percent from the same period last year. The sum of their operating profits plunged from about 1.2 trillion yen last year to 14.5 billion yen.
However, all of the firms except Mitsubishi Motors Corp. (OOTC:MMTOY) revised upward their earnings forecasts for the business year. The revised forecast for their combined consolidated operational profits was 19 billion yen, up from an initial forecast of a 985 billion yen deficit.
For each of the seven companies that forecast a profit, cost-cutting measures softened the blow caused by the strong yen and decline in earnings. Among them, Nissan Motor Co. (OOTC:NSANY) took drastic restructuring measures, with almost no new hires to be taken on next spring and regular employee numbers being reduced by 4,000 across its group companies.
Recovery in emerging economies such as China and India also boosted production at the seven firms.
In the revised forecast, Honda increased its projected sales figures in China, India and other Asian countries for the business year by 70,000 units, and Nissan raised its prospected sales figure in China for the forecast period by 30 percent.
Suzuki Motor Corp. forecast an operating profit in and around India, but excluding China, of 25.4 billion yen, up by 23.1 percent from the same period last year.
In addition, sales of new vehicles have risen on the back of car-purchase incentive schemes in many Asian countries, including the eco-car tax breaks in Japan. ===
Recovery still unclear
However, it is unclear whether the recovery will continue, as it is widely expected the yen will become stronger in the second half of the business year.
Honda has raised the yen-dollar exchange rate figure it is using for its calculations for the business year to 90 yen from the 91 yen figure it was using in July.
